There is growing evidence that schizophrenia is a neurodevelopmental disorder affecting frontal, temporal, and limbic areas of the brain. A relatively neglected, but in some respects ideal, probe of fronto-temporal limbic system physiology is olfaction. Studies have now demonstrated that patients with schizophrenia are impaired on psychophysical tests of odor identification and detection threshold sensitivity. Unlike their cognitive neuropsychological deficits, which are relatively static, patients' olfactory abilities appear to decline linearly over time. However, family studies have documented odor identification deficits in unaffected first-degree relatives of patients. This suggests that olfactory brain regions are affected by both neurodegenerative and genetically-mediated neurodevelopmental processes. This project represents the only systematic effort to characterize the olfactory deficits of schizophrenia in vivo from a neurobiological, rather than simply behavioral, perspective. Our efforts, to date, have established that 1) specific structural abnormalities exist in the brain regions subserving olfaction; 2) neurophysiological measures of early cortical sensory processing are disturbed; 3) similar structural and physiological deficits exist in first-degree relatives of patients; and 4) abnormalities appear to involve peripheral, as well as central, components of the olfactory system. In this application, we propose a more comprehensive assessment of structural and functional abnormalities of the olfactory system. We will study 40 patients with schizophrenia, 40 otherwise healthy family members, 40 unrelated healthy controls, and 40 bipolar patients with psychotic features as psychiatric controls. New methodologies will be employed to examine peripheral components of olfactory sensory processing, i.e., nasal cavity and associated peripheral olfactory receptor neurons (ORNs), in addition to olfactory cortex, in both patients and family members. Complete multifaceted assessments will be obtained for each individual, to allow us to delineate the inter-relationships among various measures of impairment, and to associate olfactory abnormalities with clinical and behavioral measures. Diagnostic specificity will be determined by comparing patients with schizophrenia (SCH) to patients with bipolar affective disorder with psychotic features (BPD). In a pilot phase, findings from this in vivo study will be integrated with the results of ongoing cellular and molecular studies that use ORN tissue biopsies obtained from these same subjects. Our working model is that olfactory deficits reflect genetically-mediated abnormalities in neuron-to-neuron connectivity, arisen from neurodevelopmentally disturbed processes of neurogenesis and synapse formation.